Prosperity Watch Issue 39, Number 2: North Carolina is Home to Fastest Growth in Share of People Living in High-Poverty Areas

Among the nation’s 50 states, North Carolina experienced the biggest increase in the proportion of people living in high-poverty areas between 2000 and 2010, according to a new U.S. Census Bureau report. The growing number of North Carolinians living in disadvantaged neighborhoods is problematic because they face restricted access to the jobs, education, and networks that can improve their financial standing. The new report signals the need for policymakers to focus on the investments and policies that support ladders of opportunity, from Murphy to Manteo, to all North Carolinians.

The report defined high-poverty areas as places that have poverty rates of 20 percent or higher. The federal poverty level for a family of 4 is stingy, a mere $23,550—which is far lower than the $52,275 needed to make ends meet in North Carolina, per the Budget and Tax Center’s 2014 Living Income Standard. And, the 2010 data reflects the 2008-2012 five-year average.

The extent of people (poor and non-poor) living in high-poverty areas is far worse in North Carolina than in the nation, according to the report. In 2010, 31.8 percent of all North Carolinians lived in high-poverty areas compared to 25.7 percent of all Americans. If you’re poor, however, the chances of also living in high-poverty areas are far higher: more than 1 in 2 poor North Carolinians live in high-poverty areas—a concept known as the “double burden.”

In the entire nation, the share of people (poor and non-poor) living in high-poverty areas grew the fastest in North Carolina from 2000 to 2010, jumping 17.9 percentage points (see graphic below). Blocks of high-poverty areas grew in every state except for Louisiana, West Virginia, Hawaii, Alaska, and the District of Columbia.

Patterns of concentrated poverty have endured for decades in certain areas due to several interacting factors such as rapid suburbanization, deindustrialization, commercial disinvestment, and racial discrimination in housing markets. It is well-documented that patterns of concentrated poverty are also rooted in government policies—including home-ownership subsidies, public-housing location decisions, interstate and highway subsidies, and deterioration in the provision of local services.

The disadvantage of being poor and residing in a poor neighborhood magnifies and perpetuates the problems faced by people who are poor, a concept known as the “double burden.” A large body of research shows that the residential segregation of people who are poor can lead to negative neighborhood effects, which are community influences on individual socioeconomic outcomes. Examples of neighborhood effects include low-quality educational opportunities, weaker employment networks, poorer health outcomes, and elevated levels of crime.

North Carolina needs policies that strengthen the opportunity structure—especially in disadvantaged areas—in order to build a more inclusive economy that will support workers and the recovery. Placed-based policies are tools that can help achieve the goal of improving equity of access and opportunity. And, there are many options available. For starters, local policymakers should consider adopting community eligibility, which allows high-poverty schools to eliminate school meal applications and offer breakfast and lunch to all of their students at no charge. And as counties expand transit in Charlotte and in the Triangle, policymakers should incorporate equity components into the transit-planning process by coordinating such plans with affordable-housing policies and considering community benefits agreements.

In the absence of policy change, North Carolina will continue to contend with communities that are disconnected to the networks that improve economic mobility.